Can I Sell Homebrew? Can I Make Pro Brew at Home?

Can you sell your homebrew? Can you make pro brew at home? In this series, we dive into the details of the legal aspects of brewing at a residence.
Can you sell your homebrew? Can you make pro brew at home? In this series, we dive into the details of the legal aspects of brewing at a residence.

A special post on homebrewing, in honor of all our friends at Homebrew Con 2016 (it’ll always be NHC to me!) who are out there kicking tires on new gear while enjoying the camaraderie and great array of homebrew seminars (and no shortage of homebrew…) out in Baltimore right now. Another homebrew-related post coming tomorrow.

So, we know you can homebrew. But can you ever sell your homebrew? In other words, can you brew beer at “home” and sell it? Could you run a bona fide brewery business out of your home; make pro brew in your garage? Let’s unpack these common questions, and we’ll do it in two parts.

Homebrewing is legal in all fifty states (thankfully, for our friends in the South, Alabama finally came around!). Federal regulations allow adults to brew up to 100 gallons of homebrew a year if living alone, and up to 200 gallons of homebrew per year for a household. As you might imagine, it’s pretty hard to police that figure, but for this risk-averse attorney, that means my 3.5G weekly batches cleanly put me under that household threshold (for 200G/year, it comes out to about 3.8G/week). Whew.

And for anyone who has thought about going pro, costs are often daunting. Many wonder, could I produce beer at my home somehow, and turn around and sell it? That would mean I could avoid spendy commercial leases, and use the space and gear I’ve got. We’re here to say maybe, and with a lot of caveats; as we don’t represent our dear readers, you should always seek an opinion of counsel in your home state. That said, we have successfully helped people open commercial beverage businesses at their residences. If you’re in the right locality, with the right separations at your premises, it may well be possible. Note, though, that commercially brewing at home as a licensed producer is one thing. That’s sanctioned “Pro Brew” (more on that next time). However, selling “homebrew” without a permit is another, and that’s always a no-no. Here are the issues at play.

First and foremost, absent federal licensure (and applicable state/local permits), you cannot sell alcohol made anywhere. Not no way, not no how.

If you’re interested in opening a commercial brewery at your home, or licensing an outbuilding as a brewery, stay tuned for our next post. If you’re curious about other aspects of homebrew, read on for frequently-asked homebrew questions.

I’m a pro brewer in planning, can I charge for homebrew at an event?

We get asked a lot about charging admission for an event hosted by a brewery in planning. Typically, the would-be brewer wants to woo investors and build up a fanbase before going live. At these events, they want to serve or sell their homemade wares. Keep in mind that the more you edge closer to money and homebrew, the more you’re walking that fine line. Homebrew simply cannot be sold, so a monetary transaction for the beer is not possible. And, in many states, including Washington, to “sell” has a particularly broad definition (including even bartering and exchanging it which may be difficult to enforce but is nonetheless the law). Homebrewers would be well-advised to seek experienced local counsel before serving homebrew anywhere beyond the home or at a friend’s house. Indeed, even pouring at festivals may require notice to applicable regulators.

Can I bring my homebrew to a wedding?

Typically, homebrew is okay at private events. The places where friends, family, and loved ones gather. Just as no one regulates the service of homebrew at your house party, these sorts of events tend to fall in this category. Technically, the federal language refers to homebrew as to be for “personal or family use and not for sale.” Thus, of course, again the standard no-sales caveat applies again. If someone wants to run a business of making custom beer for private events, we’re talking about a licensed business, and not a homebrew operation. Unlike other industries, such as baking or candy-making which can often be conducted right out of the kitchen with minimal permitting, brewing alcohol for commercial purposes is highly regulated. It needs a permit, taxes must be paid on production and, as we’ll touch on tomorrow, it may or may not be possible at a residence.

I’m 18, can I make homebrew….?

According to federal regulations, any adult may produce homebrew. Further, federal regulations clarify that an adult is someone aged eighteen or older. Of course, drinking age laws still apply. Moreover, states can also restrict production of homebrew to those older than 21. But, if your state allows 18+ production, a Mr. Beer Kit for high school graduation is a viable gift idea for your favorite niece or nephew, although probably frowned upon by mom and dad.

Are the gallon limits for beer only, or does wine count?

Cheers to diversifying your homebrewing interests. If you’re seeking a compliant homebrew path, but the 100G/200G homebrewing limitations aren’t enough to keep the whistle wet, you might consider making wine (which includes wine, cider, and mead). Federal regulations give you an additional 100G individually/200G household allotment for winemaking. Brew on.

What about home distilling, can I do that?

Not legally, no way. Home distilling is illegal. Over cocktails, I’ve pontificated about what a licensing process for this might look like, maybe involving permitting and training (and, of course, a healthy fee to the applicable regulators for the classes and annual right to do so). It hasn’t happened yet (and I hope somewhere, someday, someone is reading this and the law has changed). But, take note! At the time of writing, there’s activity in the House and Senate that may help make a path possible. This effort is thanks to the efforts of the Hobby Distiller’s Association.

We’ll add other Homebrew Law FAQs as they come to us.

Read More

Special Events Permits Come to Washington Breweries!

Thanks to efforts by the Washington Brewers Guild, brewers can expand the ways they sample and sell their beers. Special Events Permits enter the landscape in 2016!
Thanks to efforts by the Washington Brewers Guild, brewers can expand the ways they sample and sell their beers. Special Events Permits enter the landscape in 2016!

Good news from Olympia! Very soon, Washington Brewers will be able to get Special Events permits to expand the way they can sample and sell their beers. Thanks to House Bill 2605 (signed by the Governor on 3/31/16 and effective 6/9/2016), brewers can seek out a special events permit up to twelve times a year. The permit lets breweries hold an event offsite from the brewery or taproom where they can sample and sell their beers directly to consumers. Brewers must seek out the permit ten days in advance of the event, and must post the permit at the premises where the event will be held.

How might Washington breweries take advantage of the Special Events permit? One example, aptly pointed out in coverage by the Washington Beer Blog, explains the scenario where a brewery on one side of the pass wants to reach out, sample, and sell to its fans on the other side of the pass. Rather than find a retail location for a tap takeover, the brewery can put together its own event to not only pour but also directly sell its beers. Breweries could also use allotted permits to serve at corporate events or other gatherings.

Ultimately, under the new law, the Special Events permit would give breweries one more way to reach out into the public, and they can do so up to twelve times per year. The permit cost is $10.00.

We’re excited to report this one, but also a little bummed it’s taken this long for breweries to get this privilege. The law revises RCW 66.20.010, where you’ll note that the present RCW 66.20.010(13) grants essentially the same right to distilleries and RCW 66.20.010(14) grants the same right to wineries, so it’s something our spirits-, cider-, and mead-making friends have been able to do for a while now. We’re proud the Washington Brewers Guild got it done, but would also support a collaborative, evenhanded approach to pushing the RCWs along in favor of all producers the future.

Read More

Legal Beer Shipping Through US Mail? Maybe Soon.

Will shipping alcohol through the US Postal Service finally be legal?
Will shipping alcohol through the US Postal Service finally be legal?

Legal alcohol shipping? Congresswoman Jackie Speier of California says she’ll introduce a bill that just might make it so. Announced through her Facebook page on July 14, 2015, Congresswoman Speier would like to “tear down the last vestiges of #Prohibition” by introducing a bill that will undoubtedly be unpopular with craft beverage fans across the United States. The bill would make it legal for consumers to ship alcohol through the United States Post Office, “expanding consumer choice and keeping the Post Office solvent in the process,” according to Congresswoman Speier.

For those out of the loop, it’s currently illegal to ship alcohol through the US Mail. It’s also not okay through third-party carriers such as FedEx and UPS, although violating their rules is not as risky as the USPS’s. For example, violators of the United States Post Office alcohol shipping prohibition technically “shall be fined . . . or imprisoned not more than one year, or both.”

Don’t get too excited yet, though. This isn’t the first time a bill like this has been introduced. However, it’ll be the first time such a bill has been introduced (if it indeed is) on new Postmaster General Megan J. Brennan’s watch. Previous Postmaster General Patrick R. Donahoe, however, publicly supported previous steps to open up alcohol shipment. Indeed, he even had ideas about making shipping easier, including introducing flat-rate boxes designed to ship bottles.

For the curious, the ban on shipping alcohol through the United States Postal Service stems back to 18 U.S.C. § 1716, a federal statute that came on the books back in 1909. The statute provides that “[a]ll spiritous, vinous, malted, fermented, or other intoxicating liquors of any kind are nonmailable and shall not be deposited in or carried through the mails.” Pretty straightforward.

Opening up beer and wine shipping through US Mail won’t be without its administrative challenges, but former Postmaster General Donahoe thought they were surmountable. For example, there are issues with shipping out of and into various states (some states allow it, some do not), and further issues with preventing delivery to those underage.

With interest in craft beverages at an all-time high, this may just be the time for a bill like this to make it through. Keep in mind, however, that secondary markets, from a consumer-to-consumer sales perspective, would still be illegal—and bartering or trading could still be deemed a sale of alcohol, prohibited under many state laws. Shipping of gifts back and forth to your buddies in different parts of the United States, however, may pass muster. So, perhaps it’s a good time to warm back up to your old college friends who may be scattered about the US, and living nearby your favorite hard-to-find source. We’ll keep you posted.

Read More

The 2015 Beer Tax Bills: Insight and Coverage

Will we see brewery tax reform in 2015? I hope so, no matter which bill ends up making it through the gauntlet.
Will we see brewery tax reform in 2015? I hope so, no matter which bill ends up making it through the gauntlet.

I want to point you to excellent reporting by Chris Drosner (aka the Beer Baron) over at the Wisconsin State Journal on the potential impact of the two competing beer tax bills. Check out his article here. We covered the Beer Institute’s Fair BEER Act and the Brewers Association’s Small BREW Act last week here, and through insightful discussion with Chris, edited it to correct and improve our coverage. Good stuff, and glad the Brewery Law Blog can help create a dialogue on these important topics, which is what Doug envisioned when launching five years ago. Most importantly for this story, Chris helps tell the part that keeps getting lost in other coverage; the Fair BEER Act is not just beneficial for “big beer.” Of course, that act would cause the biggest cuts to the federal revenue, but may also position the majority of today’s brewers for the most explosive growth. Check out Chris’s article for more details on that. What do you think?

Note: I should disclose, I’m a member of the Brewers Association. However, as a member and given my position as a small-brewery lawyer, I’m interested in what’s best for craft breweries but also the beer industry at large. At times, the line drawing between “us” and “them” and “our growth” vs. “their growth” can seem less important, and this tax scenario might be a case where everyone could come together and agree that more jobs and growth in the entire beer industry is a good thing. After all, consumers still seem to be cheering for the little guys, even when they’re not so little anymore. I doubt that tax cuts and attendant growth across the board will dupe craft consumers and change their David-leaning preferences. Even if big beer exposes more would-be craft beer lovers to the product through their efforts to become more relevant, I think that, just like all of us did, we’d eventually still see those consumers start coming out to their local taprooms, plugging into the truly craft beer scene, and evangelizing the awesome awesome stuff microbreweries are making today. That excites me more than line drawing on these tax issues here. Either way, passage of some measure of brewery tax reform would be a wonderful thing, and a huge accomplishment for the industry.

Read More

Washington Brewery Law Resources

When opening a brewery, all the laws and regulations can feel daunting. Here's a short list of key Washington Brewery Law Resources to help kickstart your understanding.
When opening a brewery, all the laws and regulations can feel daunting. Here’s a short list of key Washington Brewery Law Resources to help kickstart your understanding.

Opening and running a brewery is complicated, and Washington Brewery Law Resources aren’t necessarily all neatly gathered in one place. It can be hard to know where to look when your curiosity encourages you to start poking around. Today, I’ll do my best to help you start your research on how breweries in Washington State are regulated. There’s a bevy of laws/code/regs out there, that’s for sure. Here are some jumping off points for your legal excursions.

Keep in mind, these sources aren’t exactly written with readability as a primary objective. Important nuances pop up in all different places. That’s what we’re here for, if you’re ever not sure about something. Indeed, it’s through the code, and our understanding of it, that we can help answer all kinds of questions on the fly, such as: (1) Can my Washington brewery deliver beer to customers in Seattle?; (2) If I’m only selling beer within Washington’s borders, do I still need a Certificate of Label Approval?; (3) May those under the age of twenty-one come into my brewery without us having food service? The list of fun questions that vary from state to state goes on.

For anyone interested in checking out primary Washington Brewery Law Resources, here are some links along with my notes to help you navigate them.

Washington Brewery Law Resources – State Brewery Law

Revised Code of Washington. This is the law that the state legislature creates and revises. Primarily, you’re looking at the content in RCW 66, although keep in mind that other provisions relating to your business, potential distribution agreements, etc. all fall in other places in the code.

Washington Administrative Code. This is where administrative agencies put their regulations. In Washington, the primary administrative authority is the Washington State Liquor Control Board. They were created by the legislature by way of RCW 66 and given authority to do certain things relating to booze in Washington State. Any regulations they promulgate become part of the Washington Administrative Code. Unfortunately, this means that there are often provisions in RCW that address some of your questions, and then provisions in WAC that address other questions. It just depends on whether the legislature contemplated something or it’s LCB creating regulations by virtue of its authority.

Between those two, that’s the heart of Washington brewery law. Keep in mind there are some sanitation requirements set forth by the Washington State Department of Agriculture, and your compliance therewith is a part of maintaining your LCB microbrewery license. Further, there are some places where the County and your Municipality step in, particularly with respect to health codes and building codes.

Washington Brewery Law Resources – Federal Brewery Law

Of course, we all know that state and local government isn’t the final authority on breweries in Washington. Indeed, Uncle Sam, through the Alcohol and Tobacco Tax and Trade Bureau (TTB), has a say on a number of matters. When it comes to TTB, you’ve got to jump to the Code of Federal Regulations (CFR) to see all the regulations they’ve promulgated, and Title 27 is the place to go. Bear in mind, if you’re brewing off-the-wall beers, such as those without hops, the Food and Drug Administration (FDA) may be your labeling authority. And, very technically, FDA has concurrent authority over your brewing business—but TTB really is the place to go when you have questions of federal brewery law. Fortunately, they’ve put together helpful resources on their website to help you wade through labeling and advertising issues.

Read More